[Oil & Gas Updates]: Hydrocarbon exploitation: Political competition and business as usual

For the past two days, Lebanese media—print, audiovisual, and news websites—has been reporting extensively on the vast potential for oil and gas reserves in Lebanon.

Lebanese daily Assafir reported on 03/11 that Parliament Speaker Nabih Berri stated that Lebanon, particularly the waters off the southern part of the country, enjoy(s) vast oil and gas reserves that exceed previous expectations and surpass those of other countries in the region, including Israel. Berri is referring to surveys conducted by Spectrum ASA, among others. Energy Minister Gebran Bassil has stated roughly the same thing on LBC’s evening news (03/11) but, unlike Berri, he was careful to add that, while these surveys are promising, it is impossible to confirm the quantity of oil and gas before drilling.

Berri blames the government, in which he is represented, for the slow pace of work, especially the repeated delays in nominating the board members of the Petroleum administration. Sources close to the government assure that this issue will be the cabinet’s next priority. However, the government finds itself in an increasingly contested position. Talks of cabinet reshuffle will likely push back decisions on other dossiers, despite their urgency, including the appointment of the Petroleum administration’s board members.

Lebanese officials, whether in power or in the opposition, are racing against time. They are aware that, to get a share of the pie, they have to be in office. Previous experiences with lucrative sectors—telecommunications for example—are good reminders that large-scale foreign investments require local facilitators in government who are subsequently well rewarded. This might explain the recent enthusiasm demonstrated by officials in the majority (Berri and Bassil over the week-end, but also Prime Minister Najib MikatiSayyed Hashem Safieddin, head of Hezbollah’s executive council, and former minister and current Amal MP Yassine Jaber as reported by Assafir on 05/11). This could also be one of the reasons why the opposition is insisting on toppling the government and forming a new one in which it would be represented. Incidentally, it is events in Syria that will determine, in large part, the fate of the present government and the composition of the next one in case of reshuffling.

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